A unique partnership has been formed between a congressional investigations subcommittee and a New York State Assembly oversight committee to pool a mass of subpoenaed information about an international cartel of uranium producers. The cartel allegedly has increased the price of nuclear fuel 700 per cent since 1972.
The key target of the joint state-federal inquiry will be Gulf Oil Corp., which investigators in both the House and the New York State Assembly have accused of helping form a price-rigging "club" to drive up the prices of foreign uranium oxide, the raw uranium that fuels neclear plants around the world and is commonly called "yellowcake."
At the invitation of Rep. John E. Moss (D-Calif.), chairman of the House Commerce Subcommittee on Oversight and Investigations, two members of the state Assembly and the director of the state legislature's office of oversight and analysis will participate in House hearings scheduled later this month.
It is the first time, according to both groups, that such state and congressional investigations have been officially merged in order to share independently accumulated evidence about alleged wrongdoing.
In a letter to Assemblyman Irwin J. Landes, chairman of the Committee on Corporations, Moss says, "Because of the mutual interest we share in this topic and due to the face that we have developed much the same information on this subject, we are most plesed to invite you . . . to join us and participate in public hearings which the subcomittee will hold with Gulf Oil Corp. as one principal witness."
Orginally formed at the behest of the governments of Canada, Australia and South Africa in order to bring stability to the world trade in yellowcake, the cartel met at least 17 times between February, 1972, and May 1974, and formally adopted "attitudes toward competitors" and frafted detailed procedures for rigging bids for uranium, according to documents obtained by both investigative groups. The state oversight office issued a report on these documents yesterday.
For example, minutes of one cartel agreement drafted in June, at a meeting in Johannesburg, South Africa, spelled out a scipt in which a previously selected "leader" and a "runner-up" would go to the market.
While the marketing agreements were in effect, legislative investigators said, the price of uranium rose from $6 a pound to $41, at a time when President Carter began publicly stressing the need for cheaper nuclear fuel.
Today Moss' subcommittee will meet in executive session to decide whether to honor Gulf requests that certain subpoenaed records be kept confidential. The records were subpoenaed from Westinghouse Electric Corp., a uranium market middleman that brought an antitrust suit aginst 29 multinational companies it claims were part of the yellowcake cartel.
Westinghouse, unable to fill uranium supply contracts with public utilities that purchase its reactors, sued Gulf and others and obtained numerous documents relating to the international marketing agreement. The U.S. Justice Department has had a grand jury investigating the matter in search of criminal violations of anti-trust laws.
Gulf, in a statement released today to coincide with the issuance of the report by the oversight office whose director is William F. Haddad, denied that its participation in the cartel was responsible for the increase in uranium prices.
Gulf officials claimed that the marketing agreements were "ineffective" and that its Canadian subsidary, Gulf Minerals Canada Ltd., participated in the cartel's meetings at the direction of the Canadian government.
Participation in the cartel by its Canadian branch, Gulf said, was no violation of U.S. antitrust laws because there was no impact on domestic or foreign commerce in the United States.
Haddad said today that among the many questions the joint inquiry intends to explore is what kind of sanction the Justice Department have may have given to the marketing agreement. Subpoenaed minutes of meetings by cartel members and correspondence with the Canadian government show that Gulf officials were concerned whether the pricing agreements would violate antitrust laws.
Some documents refer to Gulf officials seeking an "expression" from Justice about the legality of the agreements, but it is not clear whether Justice Department officials issued the firm a legal opinion.
Haddad's committee, crated by the legislature in 1975 to serve all capitol commitees, will bring to Moss' committee a freewheeling investigative style that has already uncovered controversies as diverse as corporate discrimination by Arab government agencies, widespread surveillance and harassment of political dissidents by New York state police, and alleged ties between a major upstate sports conglomerate and the underworld.
Participating in the House hearings with Haddad, who will serve as counsel, will be Democratic Assemblyman Landes, who is a former official of the Atomic Energy Commission, and the Republican Assemblyman Lloyd Riford, representing the minority party.
Hadded, son-in-law of New York millionaire John Hay Whitney and former aide to Robert F. Kennedy, has had a flamboyant career encompassing federal service in the Peace Corps and Office of Economic Opportunity, state and city politics, publishing, investigative journalism and private business consulting.